Members of the University and College Union (UCU) across the country, including at Manchester University, are voting on whether to take industrial action over drastic changes to lecturers pensions.
Dr Adam Ozanne, a Senior Lecturer in Economics at the University of Manchester and Secretary of its branch of UCU has told The Mancunion that, “During a golden period of increased fees universities have seen their revenues rise dramatically. However, the share of total income going to frontline teaching and research staff has stagnated while wages have fallen by 16% in real terms since 2009. And now they are trying to shaft staff further by slashing the amount of money we will receive in retirement”.
Previously, The Mancunion reported that the Universities Superannuation Scheme (USS) Pension deficit had ‘skyrocketed’ to £9 billion (as reported in the Financial Times), but Dr Ozanne called this “scaremongering”, as he believes it to be based on a flawed and discredited valuation methodology and designed to enable employers to shift risk from institutions to individual USS members.
If industrial action is voted for on Friday 19th January, Dr Ozanne told The Mancunion that the resulting strike will last a week.
Russell Group universities that were established before 1992 currently pay into what is known as a ‘defined benefit scheme’ pension that is managed by USS, although decisions made about it are made by Universities UK (UUK).
USS take a percentage out of employees’ pay, which is then matched or more by the employer. This is invested in a pension fund which they can then withdraw at the point of retirement.
UUK announced in November 2017 that they now want to change this to a ‘defined contribution scheme’ (that will still be managed by USS) in order to counteract the apparent pension deficit.
This would mean that employee and employer contributions will be invested in the stock market, with the aim of growing it over the years before retirement. Each employee in the scheme then receives a share of the pot when they leave the employer.
This can pose a substantial risk on the employee, as it is not guaranteed that these investments will be fruitful. Their pension may in fact be less than their initial contribution.
UCU estimates that a lecturer joining a pre-92 university and USS today would be £208,000 worse off than they would have been under the current USS scheme, and £385,000 worse off than if they instead joined a post-92 university and the Teachers’ Pension Scheme (TPS).
General Secretary of the students’ union Alex Tayler told The Mancunion: “there has been trouble brewing with regards to the reform of the USS pension scheme for a long time. I think it is clear that some level of change is required to ensure the future viability of the scheme.
“However, there is dispute over what sort of change should occur. Consequently, it is likely that the New Year will bring significant industrial action. Whilst this is not a matter for the Students’ Union to resolve, I would like to make it clear that we will do all we can to support students if their study is disrupted.”
A university spokesperson told The Mancunion: “two proposals were put forward to the USS Joint Negotiating Committee at its 18 and 19 December meetings, one from UCU and one from UUK. Both proposals involved benefit changes. No decision was made on either proposal at these meetings and further negotiations will continue.
“Should the JNC conclude that reform of the benefit structure is necessary, all USS employers would be required to go through formal consultation processes with their own affected employees and their elected representatives. However until then we are not in a position to comment further.”